First we had the arguments over global warming. China asserts that it has the right to produce as much carbon per person as we do. In theory that’s fine, in practice that means a rather unpleasant planet in a hundred years or less. But those who created the mess won’t be around to suffer the […]
Read more...The great imperial struggles of the 1800s were over control of strategic or otherwise prized resources, and the hostilities they generated helped stoke World Wars I and II. Many believe the Iraq war was all about oil. China is considering adopting a contemporary variant of the colonial model. A Ministry of Agriculture proposal suggests that […]
Read more...A Wall Street Journal survey of 53 economists found the great majority said that the spike in food and energy prices is the result of supply and demand, not speculation. At the same time, the average forecast among this group is that oil will be at $93 a barrel by year end. While the article […]
Read more...India has halted futures trading in certain types of commodities in an effort to combat inflation by reducing speculation. Observers argue this is likely to be ineffective, arguing that the price rise is fundamentally driven. It is true that just about every major economy ex the US and Japan is suffering from inflation (and most […]
Read more...Goldman foresees a continue rise in oil prices due to continuing capacity constraints and continued strong demand from emerging economies. From Bloomberg: Crude oil prices may rise to between $150 and $200 a barrel within two years because of a lack of adequate supply growth, Goldman Sachs Group Inc. analysts led by Arjun N. Murti […]
Read more...In a bit of synchronicity, food worries are getting prominent billing tonight in the media. The Financial Times” Martin Wolf sketches out some dimensions of snowballing agricultural problems and possible solutions. Wolf’s piece endeavors to cover a lot of ground, which means of necessity it gives short shrift to depth. It touches on the central […]
Read more...Dear readers, I will give more measured impressions of the Milken Conference in a day or so, when I it is over (we have another day, but the last day is far thinner in terms of offerings) and have had a day or so to reflect. However, to give a highlight, a subtext was was […]
Read more...A good piece in the New York Times today, “Price Volatility Adds to Worry on U.S. Farms,” describes how the runup in agricultural crop prices is making life harder for farmers. The recent upswing, and the entry of speculative capital, has led to a sharp increase in volatility (note that that’s the reverse of what […]
Read more...Paul Krugman, commenting on a Wall Street Journal article that invoked, then tried to dismiss, concerns about resource scarcity, defended Malthus: Malthus was right about the whole of human history up until his own era. Sumerian peasants in the 30th century BC lived on the edge of subsistence; so did French peasants in the 18th […]
Read more...Even though the seeming suddenness of the onset of food inflation and shortages has caught many by surprise, this too was predictable. I recall reading a Barrons Roundtable interview some years ago, perhaps around 2000, when Jim Rogers pointed out that China had set a goal for each person in the country to eat one […]
Read more...Food shortages have gotten an uptick in press coverage in the last two days due to a G7 pronouncement that was curiously interpreted differently by the New York Times and the Financial Times. First, the NY Times: The world’s economic ministers declared on Sunday that shortages and skyrocketing prices for food posed a potentially greater […]
Read more...Reader notice: a bit terse in our own commentary due to (grr) internet outage… A New York Times article, “Odd Crop Prices Defy Economics,” discusses the fact that there have been frequent disparities between cash and futures prices in some agricultural commodities since 2006. While this pattern has never taken place before and experts blame […]
Read more...As the goldbugs load up on gold futures, one of the main buyers of physical gold in pulling back. From the Financial Times: As India’s voracious appetite for gold wanes, producers of the precious metal are taking heed. Indian consumers buy about 25 per cent of the world’s gold, the vast majority of which is […]
Read more...I’m late to this item, which appeared in the Financial Times on Thursday, but according to Google News, was not reported elsewhere, so I thought it was still worth featuring. The IMF warned that commodities prices include a speculative element as investors are treating it as a new asset class and a safe haven in […]
Read more...We had observed that commodities prices looked overbought, historically fell during recessions, and in recent years had been strongly influenced by emerging market demand, which looked vulnerable to a US slowdown. These observations have proven out much sooner than we anticipated. Commodities continued their fall today. From Bloomberg; Gold headed for its biggest weekly drop […]
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